Closing summary: Economists hope for US 'soft landing'
The consensus after the US jobs figures appears to be that the Federal Reserve will be much less likely to hike rates further after unemployment rose.
Higher unemployment suggests the world’s largest economy is slowing, and therefore might not need much higher interest rates to calm inflation. But economists are hopeful that the slowdown might stay at that.
Former White House economist Betsy Stevenson, now an academic at the University of Michigan, thinks the jobs data shows the Federal Reserve is on the right path to the fabled “soft landing”: cutting inflation without a painful recession.
A soft landing requires slowing, but not stalling the economy and that is the miracle that the Fed is achieving (knock on wood, still a ways to go ). https://t.co/GKBefun8ht
— Betsey Stevenson (@BetseyStevenson) September 1, 2023
Janet Mui, head of market analysis at wealth manager RBC Brewin Dolphin, said:
Today’s US jobs report strengthens the case for the Federal Reserve putting a pause or even an end to its interest rates hiking campaign in the September meeting.
The report should be positively received by markets. The data suggests the US labour market is loosening but still in good shape, which supports the case of a “soft landing”.
In other business and economics news today:
The British defence company BAE Systems is setting up a local entity in Ukraine and has signed deals with its government to help ramp up its supply of weapons and equipment.
UK house prices fell 5.3% in August compared with the same month last year, the fastest annual drop in 14 years, according to Nationwide Building Society.
Superdry has swung to a near £150m loss and said it expected sluggish sales this year as the cost of living crisis hindered recovery plans at the struggling British fashion retailer.
The UK economy recovered to pre-pandemic levels in the fourth quarter of 2021, earlier than previously thought, the Office for National Statistics (ONS) has said after significant revisions to GDP data.
The UK’s manufacturing sector has slumped to its slowest activity since the depths of the coronavirus pandemic lockdowns, according to the purchasing managers’ index (PMI).
You can continue to follow our live coverage from around the world:
In the UK, the new school safety warning was prompted by a beam collapse at a building considered safe
In the US, two more Proud Boys face sentencing on US Capitol attack charges
In our coverage of the Russia-Ukraine war live, the Kremlin suggests any BAE Systems Ukraine factories would be a target for Russian military
And in sport, it’s transfer deadline day for the English Premier League: Liverpool reject £150m Salah bid, Spurs agree £45m Johnson deal
Thank you for reading the live blog this week as the summer drew to a close. Please do join the one and only Graeme Wearden on Monday for more. JJ
Updated
The hopes for an end to Federal Reserve interest rate rises – after a surprise rise in US unemployment – appear to have helped stocks on Wall Street.
Here are the opening snaps from the US stock markets:
S&P 500 UP 27.48 POINTS, OR 0.61%, AT 4,535.14
NASDAQ UP 96.80 POINTS, OR 0.69%, AT 14,131.76
DOW JONES UP 211.07 POINTS, OR 0.61 %, AT 34,932.98
